Dow rallies by 1,000 points, erasing record Christmas Eve losses

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Dec. 26, 2018, 1:34 PM GMT / Updated Dec. 27, 2018, 12:24 PM GMT

By Lucy Bayly

In the first day of trading since Monday's record decline, the Dow Jones Industrial Average on Wednesday soared by over 1,000 points, erasing its historic Christmas Eve losses to set a new record: Most points gained in one day.

The broader S&P 500 was also higher, notching a 4.9 percent rise, and the tech-heavy Nasdaq picked up by around 5.8 percent.

Market participants had been bracing themselves for volatility as trading resumed after the holiday break, with tensions and unpredictability high due to President Donald Trump's sharp criticism of some members of his economic team and a record plunge for the Dow, which tanked by 653 points on Christmas Eve.

Japan's Nikkei index plunged into a bear market on Tuesday, falling 5 percent. Early Wednesday overseas trading saw a continuation of the sell-off, with investors uneasy about the government shutdown in the U.S., the standoff between Trump and the Federal Reserve, and increasing turmoil and staff turnover in the White House.

Markets in Britain, Germany, and France are still closed for the holiday and will reopen Thursday.

However, that call, which a Treasury official said was meant to be "a reassuring step," seemed to have merely rolled eyes among the banking community, with some chief executives "totally baffled" by the "unnecessary" step, according to one report.

Rep. Maxine Waters, D-Calif., the ranking member of the House Financial Services Committee, described Trump's maneuvers and Mnuchin's recent actions as "erratic," in a statement released on Monday, saying their moves were "creating uncertainty and instability in the markets."

"It would be in our nation's best interest if they stopped what they are doing," she said.